Allied Domecq's bid for Montana flounders

Published: 23 July, 2008

Lion Nathan wins out

Lion Nathan, the New Zealand brewer, has won the bidding battle with Allied Domecq for Montana. Lion, which is owned by the Japanese brewer, Kirin, already held 28% of Montana and by Tuesday had snapped up a majority shareholding. The setback gives credence to the rumour that Allied, along with Diageo, is poised to bid for California's Kendall-Jackson. K-J has been the subject of speculation for some time, following Jess Jackson's retirement. Jackson hived off the premium Artisan & Estates division and hired Lew Platt from Hewlett-Packard to look after the bulk business. Diageo already owns the Napa winery Beaulieu, which produces Blossom Hill, and will get Sterling Vineyards and probably Cuve Napa when the Seagram deal goes through. Allied bought the Champagne brands Mumm and Perrier-Jout from under the noses of the Seagram bidders. Allied Domecq Spirits and Wine's (ADSW UK) bid for Montana was made by Millstream Equities Limited, a wholly owned subsidiary of Allied Domecq PLC. ADSW (UK) announced the consolidation of the group's premium wine brands into its own distribution network while it finalises the distribution arrangements for Mumm and Perrier-Jout. At the time of the bid Chris Heath, managing director at ADSW (UK), said: "The news reinforces the group's intention to build a premium wine portfolio on a global basis. A wine business like Montana, with its premium and super-premium brands and strong export markets, is the sort of acquisition that would fit naturally into our strategy here in the UK. "An acquisition on the scale of Montana would add significant mass to our current wine offering in the UK. This, alongside Mumm and Perrier-Jout, would make Allied Domecq a significant player in the UK wine sector, complementing our status as the UK's second largest supplier of premium spirits," said Heath. The Montana range comprises Montana, Brancott Vineyards and Church Road wine brands, which sell approximately 350,000 cases in the UK. The group also owns sparkling wine brands Lindauer and Deutz, which account for a further 100,000 cases.